Taking a leaf out from private sector peers, state-owned banks are planning to engage senior executives on contractual basis for specialised high level operations.

The banks plan to hire economists, technology specialists and senior marketing professionals to compete with foreign and private sector banks. The move is aimed at containing the wage bill and yet engage the best talent on short term assignments ranging upto three-years to carry out the key tasks.

A public sector bank chairman said that though banks want to move more towards contractual employment, there is a major opposition from various segments including the unions.

At present, only 2% of the workforce in these banks are on a contractual basis.

"The public sector banks have quietly started recruiting on a contractual basis which means that the employee would not be entitled to the retrial benefits and also several other perks but we will continue opposing this," TM Bhasin, chairman and managing director of Indian Bank told Hindustan Times that only a handful are on contractual basis and those recruited on a contract basis get high levels of remunerations.

"Only for very specialised operations, banks are resorting to contractual employment," he said.

There are about one lakh vacancies in the banks at present but estimates suggest that there could be five lakh vacancies in the next five years as banks plan to go in for major expansions.